Ken Michell was working the afternoon shift, in his third decade at the Babine Forest Products mill. He remembers seeing a fireball racing toward him, and ripping off his hardhat because it was on fire.

Later, his wife Theresa recalls, a doctor in a Vancouver hospital told her Mr. Michell's organs were shutting down and that she should call their children.

In October, after months of surgery and rehabilitation in Vancouver, Mr. Michell returned to Burns Lake. He was the last of the workers injured in the Jan. 22 explosion that levelled the mill to come home. This week, the couple was settling into a modular home equipped with a wheelchair ramp.

Story continues below advertisement

They were there when they heard the news: The mill that exploded, killing two and injuring 20 more, would be rebuilt, pumping jobs, hope and money into a town that needs all three.

Tempering the celebrations is the reality that hit this week when employment insurance ran out for about 100 of the mill's 250 employees. (Others have have found work; some have been on long-term disability benefits.)

For the couple, the news was tempered by sorrow for those who died and those whose lives will not be the same.

"I'm happy they are going to rebuild," Mrs. Michell said this week. "I'm happy and sad at the same time. Because my husband can't go back to work there."

Those mixed emotions – optimism layered with grief and some uncertainty – run through conversations in and about this town about 220 kilometres west of Prince George. The mill's owners announced their decision to rebuild even as an investigation into the cause of the blast is still under way.

Last week, WorkSafe B.C. announced it is referring its investigation into the Babine Forest Products explosion – and a probe of a second sawmill explosion, which occurred in Prince George in April – to Crown counsel, raising the possibility of fines or even jail time for violations of B.C.'s Workers Compensation Act.

There are also questions about whether a region ravaged by a record-breaking pine-beetle infestation has enough timber to feed surrounding mills.

Story continues below advertisement

Story continues below advertisement

A diminishing supply

A mainstay of the local economy since it opened in 1974, the Babine mill is owned by Oregon-based lumber operation Hampton Affiliates and the Burns Lake Native Development Corp., the business development arm of six local Indian bands. Dozens of band members worked at the mill.

After the explosion, many of those workers struggled, says Al Gerow, chief of the Burns Lake Indian Band and president and CEO of BLNDC. Counselling services were stretched. Relationships failed.

"It's incredible, what we have been through. But now we can see a ray of hope."

Mr. Gerow wants the province to help those workers get back on their feet, perhaps with training so they can help run the new high-tech mill. It will be two-thirds the size of the former operation, reflecting tighter timber supplies.

To encourage Hampton to rebuild, the B.C. government effectively guaranteed access to about 600,000 cubic metres of wood per year for the mill.

Story continues below advertisement

That creates questions for three other major mills in the Lakes timber supply area, which encompasses 1.1 million hectares in north-central British Columbia and includes Burns Lake and smaller communities.

The B.C. government has long known it would have to deal with "falldown" – the point at which the annual allowable cut would have to be reduced as wood damaged or killed by the pine-beetle infestation passed the point of having any market value. The loss of two sawmills pushed the issue onto the front burner. To accommodate the Burns Lake mill, the province will need to squeeze more fibre from the same diminishing supply of wood.

Jim Girvan, an independent timber-supply analyst who runs MDT Management Decision and Technology Ltd., says his computer modelling suggests that there is simply is not enough timber, in the medium term, to keep four big mills running.

"So they made a decision to rebuild. For the town of Burns Lake, this is a good thing. But what about the other guys?" he said.

Those "other guys" include Canfor and West Fraser. If all the mills in the region run at capacity, including a new mill at Burns Lake, Mr. Girvan's model points to a shortfall of 1.7 million cubic metres of timber each year. In that scenario, mills without an assured source of timber may close or run at less than full capacity.

Since 2005, dozens of mills have closed and thousands of forestry jobs have disappeared in B.C., largely as a result of a collapse in the U.S. housing market.

In an interview this week, Hampton Affiliates CEO Steve Zika said the company sees the new mill as a good opportunity. Markets in Asia are growing, U.S. housing starts are rebounding, and the closing of so many mills has tightened supply. In the past year, the price of a thousand board feet of lumber has climbed by $100 to $363. The last time lumber prices were over $355 for a four-week period was June, 2010.

With the promise of a guaranteed wood supply eight years after the B.C. Liberal government eliminated such arrangements, the Hampton board envisions a new, efficient mill.

"We know the pine beetle is going to take some production down somewhere around the province, most likely," Mr. Zika said. "So for the survivors, I think the future is going to be bright."

A smaller, more efficient mill makes sense for a company that has a guaranteed supply of timber, said John Allan, president of the Council of Forest Industries, which represents companies in the Interior.

But the province still hasn't come up with a solid strategy to deal with the bigger picture, he said, adding that he expects up to three mills in regions affected by the pine-beetle infestation to close within the next five years.

"I think the government faces a credibility and public confidence gap on the issue of timber supply, on the state of the inventory, on silviculture," Mr. Allan said. "We need a government action plan to deal with timber supply shortfalls that are coming soon."

The learning curve

Hampton's Mr. Zika would not say how much the new mill will cost, or how many people it will employ. But it is certain there will be fewer jobs. Mr. Zika also acknowledged lingering resentment in the community about the damage from the explosion.

"I believe there is still some anger," he said. "I can understand why people are saying, 'Geez, the company must not have done the right thing because the sawmill blew up.' If I had lost my son or spouse, I certainly would have that too. ... A lot of it may be because we still don't have the answer on the actual cause."

For Ken Michell, going through a slow, painful recovery, such answers would not change his mind on one thing.

"Even if they rebuild the mill, I would never step foot in it again," he said this week.

Amid it all, there's hope. Luke Strimbold, who was newly elected as mayor of Burns Lake when the mill exploded, says the past year has been a steep learning curve, on multiple fronts. With plans for a new mill confirmed, he hopes the most lasting lessons will be ones of resilience.

"It's a big relief for our community – both emotionally and economically," he said from his family-owned logging operation just outside Burns Lake. "It also showed that if you have the provincial government, local government, First Nations governance and working together, you can get to the right decision."

Based in the press gallery of the B.C. Legislature in Victoria, Justine has followed the ups and downs of B.C. premiers since 1988. She has also worked as a business reporter and on Parliament Hill covering national politics. More

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.